Maharatna major GAIL India has shown interest to the state government in having an equity partnership in a downstream project of East India’s largest petrochemical company Haldia Petrochemicals (HPL).
Purnendu Chatterjee, the chairman of The Chatterjee Group (TCG), a major stakeholder in HPL, had recently announced about a Rs 4,000 crore investment plan in eight different projects, over a period of three to three-and-a-half years. It included butine-1, ethylene propylene diene monomer (EPDM), styrene-butadiene rubber (SBR) and maleic anhydride and the firm was looking for “private equity (PE) partners at a debt equity ratio of 1.5:1.”
Late last month, HPL had decided to go ahead with two chemical downstream projects to get out of the financial blues. It was reportedly planning to float a request for proposal from global majors for butiene-1 project, which requires an investment of Rs 200 crore and was also looking to rope in international investors for a Rs 1,000-crore synthetic rubber manufacturing plant.
Confirming the development, a top GAIL official said, “We have submitted a proposal with the state government to have equity stake in a downstream HPL project. During our chairman’s recent visit, we had shown interest in gas pipeline project, a liquefied natural gas (LNG) floating storage and regasification unit (FSRU), city gas supply project and the HPL plan.” HPL managing director Partha Bhattacharyya confirmed today speaking on the sidelines of a CII summit here that these projects are key for the firm, which is reeling under a financial crisis. “ Since I took over early this year, even the production was hit four or five times due to to some technical problems.”
According to reports, the firm’s borrowings zoomed from just above Rs 800 crore during the beginning of this financial year to above Rs 1,400 crore. However, the GAIL official did not disclose on which project the firm is going to partner HPL.
Meanwhile, the major stake holders of HPL — TCG and the West Bengal government — are trying to sort out the dispute ove the battle for majority shareholding. The Supreme Court had recently dismissed the TCG petition against the decision of the Calcutta High Court. The Group had challenged a high court verdict that set aside a CLB directive asking the state government to exit the project by selling its stake to TCG.
